The Republic of India

Presented by: Team 3James DraperBrandon Patch

Marcus RobinsonShawn Stanford

Debesh Shrestha

India

Background

Economic Situation

International Aspects

Special Problems

The Future

Demographics

• Located in South East Asia

• Shares boarder with:– Afghanistan and Pakistan (West)– China, Nepal, and Bhutan (North East) and – Bangladesh and Myanmar (East)

Demographics

• 7th largest country of the world- Area covered (3.3 million sq. km)

• 2nd highest population of the world

- Population (1.1 billion)

• Density (329 per sq. km)

History

• First civilization – Indus River Valley

(3300 BC)

• India = ‘Indus’

• Successor – Vedic civilization

History

• Small kingdoms – ‘Mahajanapadas’

• Unification – Emperor Ashoka the Great

• Formed base of the Indian Culture and heritage

History

• British as traders• East India Company• British took over India• Rebellion• Mahatma Gandhi

“Be the change you want see in the world.”

Politics

• Largest among democratic countries

• Three branches of governance:

- Legislature

- Executive

- Judiciary

• President head of state

• Prime Minister head of government

Culture

• Rich cultural heritage

• Influenced by Islam – Taj Mahal

• Music – Carnatic and Hindustani

• Cuisine – Spicy and sweets(Bombay House)

More Information

• Capital – New Delhi

• Currency – Indian Rupees

• Official Language – Hindi

• Main Religion – Hinduism

• Nation animal – Lion

India

Background

Economic Situation

International Aspects

Special Problems

The Future

India Is Tiger In Cage

Before the last decade India was probably on the short list of the countries with the worst economic systems of almost

every economist outside of India.

1947 History

• Its annual per capita income was only $50 for its 350 million people – Life expectancy was only 32 years of age – Literacy rate was 17%

India’s growth from 1960 to 1992 could have been much more substantial given India’s

human, institutional, and natural capital at hand.

Jagdish Bhagwati and other economists attribute this failure to “nearly three decades of illiberal and autarkic policies.”

Indian Growth Miracle

One cannot help but wonder what sparked this amazing growth in India’s economy over the last 15 years. According to Atanu Dey, “Some observers have called the change from an inward-looking autarkic economy to an open, market-driven economy as the Indian Growth Miracle. The neo-liberal economic reforms propelled India to become one of the fastest-growing economies in the world.”

India’s Quasi-Socialist Economic System

• Strict government control over – Private sector participation – Foreign trade– Foreign direct investment

The average size of tariff for India is 22%, more than double the average in Asia's developing countries.

India’s GDP growth rate is 8.9%

making India the second fastest growing major economy in the world.

India

Background

Economic Situation

International Aspects

Special Problems

The Future

Exports

• Gems and Jewelry

• Ready-made Garments

• Leather

• Leather Products

• Agricultural Products

• Engineering Products

• Minerals

Imports

• Machinery

• Transportation Equipment

• Mineral Fuels

Trade Partners

• United States

• Former Soviet Union

• European Community

• Japan

Trade Improvements

• Simplified Tariff

• Less Import Restrictions

- Eliminated Quantitative Restrictions -Removal of all import restrictions maintained

for balance-of-payments reasons

• Reduced Export Restrictions

BBC News Oct. 27, 2006

India says it has agreed to meet US trade officials next month in a bid to hammer out differences in achieving a global trade agreement

• “Indian trade minister Kamal Nath said he wanted the stalled Doha negotiations to resume as soon as possible.”

• Nath said, ‘India could not open its markets to subsidized agricultural products from the US.’

Investment

“Despite further liberalization of the FDI regime, India’s record in attracting investment remains disappointing, with FDI accounting for some 1% of GDP. The government has also taken various steps to improve enforcement of intellectual property rights which should help to attract FDI.”- India: June 2002, WTO.org

India

Background

Economic Situation

International Aspects

Special Problems

The Future

Special Problems

1. Poverty 2. Corruption

POVERTY

The major causes for poverty have been:

• high population growth rate

• high illiteracy (about 35% of population)

• unemployment and under-employment

• protectionist policies pursued till 1991 that prevented high foreign investment

NSSO Poverty Rate

Year Poverty Rate

1977-78 51.3

1983 45.65

1987-88 39.09

1993-94 37.27

2000 26.09

2004-05 22.15

Outlook for Poverty Alleviation

• The Eradication of poverty in India can only be a long-term goal. But, good progress is being made.

CORRUPTION

• “The chief economic consequences of corruption in India are the loss to the exchequer (revenue collector), an unhealthy climate for investment and an increase in the cost of government-subsidized services.”

• Forms of Corruption– Bribes– Extortion– Embezzlement– Kickbacks

Areas of corruption in Indian States

• Study done by Transparency

International• Darker regions more corrupt,

meaning less transparency in

government actions.

CORRUPTION

• The RIGHT TO INFORMATION ACT (2005)– “any citizen of India may request a department of

the Central Government, State Government or Public Sector company or bank for information on almost any question related to the department or company's functioning.”

Other Important Economic Factors

• Unemployment

• Uneven distribution of wealth

India

Background

Economic Situation

International Aspects

Special Problems

The Future

India’s Promising Future

• Infrastructure

• Growth

• Services

• Education

Infrastructure Development

• $15 Billion Development

• Shops in Bangalore, Mumbai, and Delphi

• An Unusual Proposal

• Infrastructure Vs. Internal Earnings

• Water Dependent

Growth

• Smart Growth• Advantages:

Promote Inner-city Development

Preserve Natural Resources

Reduce Sprawl

Save Taxpayers Money

Integrate Needs

Growth

• Further Initiatives still needed

– Water Systems, Ports, Civil Aviation, Telecom, Roads

• Foreign InvestmentTriggers Technology Efficiency of Resources Enterprise DevelopmentContribution to Trade

Service Sector

• More than ½ of GDP

• Fundamentals of a Developed Country

• CAUTION! Could Distort Growth

• But, FDI has risen from $671.4 M to $2 B

Service Sector

• Liberal Industry Policy

– Will Keep Industry and Services Balanced

– Evidence of Increasing GrowthAlready showing results: Auto Industry

16.49 Percent Growth within last year

Education

• Challenge: Acquiring Global Workplace Skills

• Population: ½ Billion under age of 25

• Goal: Turn Youth into an Asset

• Encourage the Brightest from Taking Their Expertise Elsewhere

• Youth to Yield many Long-term Dividends

Vision

• An “Inclusive, Prosperous, Democratic, and Equitable India.”– Manmohan Singh

(India’s Prime Minister)

Questions ?